“We have decided to reduce production by 500,000 barrels a day through the first quarter of next year,” said Russian energy minister Alexander Novak. The cuts come on top of a reduction of 1.2 million barrels a day that they have been observing for the past three years.
The sticking point in the talks, which dragged on over two days, appears to have been how to share the cuts among the 14 OPEC countries and nations like Russia that have been coordinating their production with the cartel in recent years.
Saudi Arabia has been bearing the burden of the largest share of production cuts recently. But some countries including Iraq and Russia have been pumping more than expected, dampening the overall impact on markets.
Analysts note that if countries are already not complying with the current agreement, agreeing in principle could be pointless. Investors seemed impressed by OPEC's resolve, however, pushing up energy prices sharply.
The price of oil had risen in recent days on expectations for a production cut and gained further on Friday. Brent, the international benchmark, jumped 86 cents to $64.25 a barrel. The U.S. benchmark gained 77 cents to $59.20 a barrel.
It's unclear whether energy prices will continue to rise, however. Even as the members of the cartel cut production, there is more oil coming to market from non-OPEC nations, including the U.S., Canada, Brazil, Norway and Guyana. That could make up for any cuts from OPEC and Russia.